To be accredited, the entity or Trust has to meet one of the following conditions:
- ≥$5M in Assets, or
- Each of the beneficial owners must be accredited.
For Trusts
To invest in a Rule 506(c) Offering that only allows verified Accredited Investors, the Trustee would have to produce documentation that the Trust meets one of the above standards. This could be in the form of a letter from the Trust’s CPA, Investment Advisor, or Attorney (someone with a license), or a third-party verification service such as EarlyIQ.com (see “Get Verified” page of our website), or VerifyInvestor.com.
For a Rule 506(b) Offering that allows non-Accredited but sophisticated Investors, the Trustee would attest (usually under penalty of perjury) in the Subscription Agreement that the Trust meets one of the above conditions.
For Other Entities
For most other types of entities, the conditions are the same. For Rule 506(c) offerings, the entity would have to produce documentation from the entity’s CPA, Investment Advisor, or Attorney (someone with a license), or a third-party verification service such as EarlyIQ.com (see “Get Verified” page of our website), or VerifyInvestor.com. For Rule 506(b) offerings, an officer, manager, GP, or other authorized person could attest to the entity’s status as Accredited or non-Accredited but sophisticated, as applicable.
